Nintendo, the Japanese gaming giant, has reportedly pushed back the release date of its next-generation console, codenamed NX, to early 2025. The news sent its shares down 6% on Monday, as investors and fans expressed their disappointment and frustration.
Why the delay?
According to Bloomberg, Nintendo informed some of its game-publishing partners that the NX will not be ready until March 2025, at the earliest. The company had previously planned to launch the device in late 2024, as a successor to its popular Switch console, which is nearing its eighth year on the market.
The reason for the delay is unclear, but some analysts speculate that Nintendo is facing supply chain issues, technical challenges, or competition from rivals such as Sony and Microsoft, who have already released their new consoles, the PlayStation 5 and the Xbox Series X, respectively.
Nintendo has not officially confirmed or denied the report, saying only that it is always working on new hardware and software. However, the company did raise its full-year sales forecast for the Switch earlier this month, indicating that the hybrid home-portable device still has strong demand and momentum.
How will this affect Nintendo?
The delay of the NX could have significant implications for Nintendo’s business and reputation. The company relies heavily on its hardware sales, which account for more than half of its revenue. The Switch has been a huge success for Nintendo, selling over 100 million units worldwide and becoming the best-selling console of 2021.
However, the Switch is also facing increasing competition from other platforms, such as mobile gaming, cloud gaming, and PC gaming. Moreover, the Switch’s hardware is starting to show its age, as it lacks some of the features and performance of the newer consoles, such as 4K resolution, ray tracing, and faster loading times.
Nintendo fans and game developers are eagerly awaiting the NX, hoping that it will offer a significant upgrade and innovation over the Switch. The NX is rumored to have a more powerful processor, a larger and sharper screen, and a new controller design. Some of the games that are expected to launch with the NX include The Legend of Zelda: Breath of the Wild 2, Metroid Prime 4, and Bayonetta 3.
By delaying the NX, Nintendo risks losing its competitive edge and customer loyalty, as well as missing out on the lucrative holiday season. The company may also face a backlash from its partners, who may have to postpone or cancel their projects for the NX.
What is the market reaction?
The market reaction to the NX delay was swift and negative. Nintendo shares fell 6% on Monday, wiping out about $4 billion from its market value. The stock has been underperforming the broader market this year, as investors have been concerned about Nintendo’s growth prospects and innovation.
Some analysts have lowered their price targets and ratings for Nintendo, citing the NX delay as a major setback. Others have maintained their bullish outlook, arguing that Nintendo still has a loyal fan base and a strong pipeline of games for the Switch.
Nintendo is expected to announce its third-quarter earnings on February 25, 2024. The company may provide more details and guidance on its hardware strategy and plans for the NX.
